Ruan returns $1M grant to build a downtown childcare facility

Ruan Transportation Management Systems alerted county officials this month that it is returning a $940,000 state grant to start a downtown Des Moines child care facility, deputy Polk County administrator Sarah Boese tells Axios.

Why it matters: The decision highlights some of the challenges and complexities associated with the state's child care crisis .

Catch up fast: Ruan was one of 23 projects awarded a Child Care Business Incentive Grant about two years ago.

• The grant program was one of the top recommendations from a task force launched by Gov. Kim Reynolds.
• The inaugural $26.6 million in funding was expected to create nearly 1,800 more child care slots across the state, including 150 from the Ruan project .

Zoom in: Ruan planned to partner with eight other employers, according to the project's synopsis in 2022.

• The concept was for the consortium to contribute towards capital construction expenses in exchange for reserving market-rate slots for its workers, Boese says.

Driving the news: Ruan was considering building the facility inside a portion of the downtown YMCA but discovered there was not enough interest from other downtown employers.

• County officials believe the need persists but more specifically for additional affordable child care options for lower-wage workers, Boese says.

The intrigue: Polk County considered partnering with Ruan and employee response indicated there was interest that would have exceeded the roughly 40 slots that could have been reserved for them, administrator John Norris recently wrote in a memo to supervisors.

Yes, but: A separate pilot program in Polk County targeting affordable child care for health care and service workers has struggled with low enrollment.

The big picture: Recipients of at least three other grants have also terminated their awards — New Hope Village in Carroll as well as PRK Williams, Inc. and TrueNorth Companies in Cedar Rapids.

• In total, almost $6.3 million —more than 23% of the inaugural grants' amounts— has been rescinded.
• That money was never spent and remains with the state, Jesse Dougherty, a spokesperson for Iowa Workforce Development, tells Axios.

What they're saying: Issues like greenspace for mandated outside play areas and costs were among the challenges of starting the downtown facility, Chris Sackett, a metro attorney assisting Ruan in the project, said during a forum hosted by the Greater DSM Partnership last year.

• Ruan now believes it's best to help existing centers achieve full staffing levels rather than building a new center, Crystal Franke, Ruan's vice president of human resources, tells Axios.

What's next: Ruan intends to use what it's learned to better develop the metro's early childhood talent pipeline with things like apprenticeship programs with high schools, Franke says.

• Meanwhile, Polk County would like state officials to consider repurposing Ruan's grant so it could be used, for example, by a nonprofit organization to expand affordable day care options, Boese tells Axios.